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At today’s Annual Press Conference for 2016/17, Heidelberger Druckmaschinen AG (Heidelberg) is underlining its aspirations to further strengthen the company’s trailblazing position in the printing press sector with the presentation of a new corporate strategy. The company’s Management Board is presenting “Heidelberg goes digital!” – a package of measures for the years ahead with a strategic focus on technology leadership, digital transformation, and operational excellence. Following the successful turnaround with a return to sustained profitability, Heidelberg will now also be aiming for continuous growth. Group sales of around €3 billion are being targeted with a large number of specific measures in the period to 2022. The company has set its sights on a further significant improvement in profitability, with EBITDA of €250 to 300 million and a net profit after taxes of over €100 million. Sales in financial year 2016/17 were just over €2.5 billion, EBITDA at €179 million and the net result after taxes at €36 million.
“Over the next five years, Heidelberg will once again become a leading light in the sector, enjoying strong growth and profits. We’ve defined the relevant success factors and have already introduced initial measures. This marks the start of a new era of growth for Heidelberg,” said the company’s CEO Rainer Hundsdörfer.
1. Technology leadership based on constant innovations focusing on customer benefits and aimed at improving productivity while also cutting costs in all print shop processes by maximizing efficiency. Heidelberg is looking to play a pioneering role in digitization (Simply Smart/Smart Print Shop) with its Push to Stop concept and also in industrial digital printing for the packaging market with the Labelfire and Primefire product lines. The objective here is to double the market share in digital printing from the current level of less than 5 percent to as high as 10 percent and generate additional sales potential amounting to around €200 million in the period to 2022.
2. Digital transformation, including the digitization and integration of the previously separate areas of equipment, software, services, and consumables with straightforward, transparent pricing of all offerings for customers. The entire work process at the customer’s print shop will be addressed from a single source using a single e-commerce sales platform. This will reduce complexity and costs for customers while also boosting their productivity. The aim here for Heidelberg over the next five years is to increase the company’s market share for consumables from the current level of 5 percent to just under 10 percent while also leveraging additional sales potential of €250 million. Part of this strategy is the takeover of Fujifilm’s coatings and pressroom chemicals business in the EMEA region, which represents a sales volume of some €25 million. It will take effect as of July 1, 2017. Heidelberg is using this takeover to expand in the attractive growth segment for consumables. The transaction is another step in pursuing the company’s growth strategy of developing a fully comprehensive cross-sector portfolio that is geared toward specific customer requirements and also further strengthens Heidelberg’s market position for coatings and pressroom chemicals. Digital transformation also means that Heidelberg will offer its know-how to other plant and mechanical engineering companies and startups in the future. Heidelberg benefits from the software and engineering expertise forming part of the new possibilities offered by Industry 4.0 – with options such as an IT suite, a cloud-based platform, and production capacities. Industrial companies such as BigRep, for example, already have their latest products for additive manufacturing (3D printers) produced by Heidelberg. The aim by 2022 is for this to generate additional sales of some €50 million with well above-average profit margins. The recent acquisition of software supplier DOCUFY to strengthen the Digital Platforms business area and expand the Industry 4.0 portfolio underlines the company’s ambitions in this direction.
€-32 million), and the net financial debt, which fell to €252 million in the year under review (March 31, 2016: €281 million). Last but not least, the leverage remained well below the target value of 2 at 1.4.
“In financial year 2016/17, we not only achieved noticeable operational improvements, but also made further progress with our balance sheet quality. Our very sound financial structure will enable Heidelberg to independently finance the upcoming investments taking the company into the digital future. Our future focus will remain on improving our asset management and cash flow, and on achieving the best possible financial result by optimizing our financing framework,” summed up Heidelberg CFO Dirk Kaliebe.
With our investments and innovations in the area of digitization, autonomous printing, packaging, label and digital printing and data-driven services, we maintained the Group’s leading market position in the year under review and, bucking industry trends, generated an increase in orders that should allow sales to remain stable year-on-year in financial year 2017/18.
With measures to enhance efficiency, we are aiming for an EBITDA margin in a range of 7 to 7.5 percent in financial year 2017/18. The Heidelberg Digital Technology segment is set to contribute between 5 and 7 percent to this result, and the Heidelberg Digital Business and Services segment between 8 and 10 percent. The Heidelberg Financial Services segment should continue to make a positive contribution to EBITDA.
As a result of the forthcoming transformation activities and the optimization of processes and structures, Heidelberg is assuming special items in the financial year ahead to be at the same level as in the year under review. Thanks to the continuous optimization of our financing framework, the financing costs are to be reduced further in financial year 2017/18, thus further improving the financial result. Against this backdrop and subject in particular to the tax risks described in the Expected Conditions section of our annual report, Heidelberg is again targeting a moderate increase in its net result after taxes, which should continue to increase in the years ahead.